Before the Industrial Revolution began, Great Britain experienced a revolution in agriculture. This revolution started when British farmers began to fence off, or enclose, common lands into individual holdings efficient for large-scale farming. By the 1800s, because of improvements in agriculture, farmers needed fewer farm laborers. Many unemployed farmworkers moved to the cities, where they created a large labor force.
The Industrial Revolution began in Great Britain because of a combination of conditions. Great Britain had what economists call the factors of production, or the basic resources necessary for industrialization: land, capital, and labor.
The cotton textile industry was the first industry in Great Britain to undergo mechanization-the use of automatic machinery to increase production. Other developments there included the steam engine, which improved transportation, and electricity, which revolutionized communications.
The steam engine could be used to power machinery as well as boats and trains. Steam-powered machinery made work easier to do and made it possible to produce a wide array of products in a relatively short time. Most of these goods were manufactured in factories rather than in people’s homes.
Life in the mines and factories of the early Industrial Revolution was hard and monotonous, and life in the workers’ homes was not much better. Working people lived in cramped and poorly maintained apartment houses called tenements. At the same time, the middle class grew and enjoyed many luxuries unknown before the industrial age. For middle-class women, this meant expanded opportunities for education and employment.
New Methods and Business Organizations The factory system introduced a new phase in the development of capitalism-the economic system in which individuals rather than governments control the factors of production. Before the Industrial Revolution, most capitalists were merchants who bought, sold, and exchanged goods. This is called commercial capitalism. The capitalists of the Industrial Revolution, however, became more involved in producing and manufacturing goods using mechanization and industrialization. Thus the capitalism of this period is often referred to as industrial capitalism.
Industrialization changed the methods of production and depended on division of labor, interchangeable parts, and the assembly line. It gave rise to a different form of business organization-the corporation.
During the Enlightenment of the 1700s, a group of economists attacked the ideas of mercantilism. These economists believed that natural laws governed economic life, and that any attempt to interfere with these natural economic laws was certain to bring disaster. Adam Smith best stated the views of these economists. Smith wrote that every person should be free to go into any business and to operate it for the greatest advantage. The result, Smith said, would benefit everyone. This system of complete free enterprise became known as laissez-faire.
As time went on, more people realized that things could not be left entirely alone. Many people, such as John Stuart Mill, felt that government needed to intervene to protect working children and improve housing and factory conditions. These people argued that laws regulating working conditions would not interfere with the natural workings of the economy. Over time, governments began to agree with these social reformers.
Many workers, however, felt that governments were not moving fast enough. Sometimes these workers called a strike and refused to work until demands were met. In order to strengthen their position, workers sought ways to organize permanently into associations called unions. These organizations gradually became legal. Some reformers of the 1800s advocated a political and economic system called socialism. In this system, the government owns the means of production and operates them for the good of all the people.
Some thinkers grew impatient with early socialism, which advocated peaceful methods to attain goals. Karl Marx, the most important of these critics, believed that all the great changes in history came from changes in economic conditions. Under capitalism, he said, labor receives only a small fraction of the wealth it creates. Most of the wealth goes to the owners in the form of profits. This unequal distribution of wealth would ultimately lead to a revolution led by the working class, or proletariat. Marxist, or radical, socialists generally believed in the necessity of revolution to overthrow the capitalist system.
They wanted to establish a system in which the government owned almost all the means of production and controlled economic planning. Two forms of Marxism that later developed are communism and democratic socialism. Marx’s ideas had profound effects in Russia.